Quality Cost and Economic Analysis. A Synthesis in the Manufacturing Systems

Abstract

The paper performs a literature review on existing models and methodologies to analyse and identify the cost of quality in manufacturing systems. The review shows that existing accounting models are insufficient to identify quality cost in detail in production processes. Existing models also do not cover the entire production activities and therefore need to be extended over the entire product life cycle. The authors therefore develop a new approach by refining and extending the method of activity-based costing to make it applicable for quality cost identification. The proposed methodology can serve as a building block for a later integration into superior supply chain management systems which allow to trigger continuous quality improvements of entire production networks.

Management and Production Engineering Review

“…• reducing the social costs of quality for producers, intermediaries and consumers, • lowering the costs of producing goods and services (Ocakci et al, 2021), • the emergence of opportunities to offer customers products and services at a lower price, • the increase in the marginal utility of the product as perceived by their consumers, • positive product evaluations, thanks to exceeding customer requirements and needs (surprise effect), • thanks to prevention and planning, the costs of manufacturing products and logistic costs are minimized, • increase in sales volume,…”